E Bye Bye BGNE And Mexichem

After a bull run for 5 days the Dow-Jones is down today. But as usual the index is only part of the picture. We have one reporting company today, a rather minor holding. Be aware that I am taking tomorrow off to trek to a distant outpatient clinic for a second Moderna jab which I suspect will not be enough to get into Britain this year—or to protect against mutations. The World Health Organisation on its fact-finding mission to Wuhan said that the most plausible cause for COVID-19 which broke out there is transmission from an intermediary animal—not a leak from a laboratory looking for harmful disease.

I have a batch of Asia shares at my bank, HSBC, which is now ceasing to offer trades or even price coverage. This chunk of assets now is in ACAT and I have no data on prices. I opened the Asia stock positions when the bank set up brokerage services at its posh branches, including mine, about 6 years ago. There is nothing as hopeless as a bank that doesn't know where its profits come from.

Today I am offering a special note covering all our drug shareholdings.

Business newspaper article

image source

Oil Patch News:

*Canada's Computer Modelling Group, whose software models reservoirs of oil and gas finds, reported on its Q3 and 9 mos in Canadian dollars, which I have not converted to USD. CMDXF reported Q3 sales down 17% y/y to in Q3, notably from a 32% drop in perpetual revenues, to $16.04 mn. Only professional service sales rose. The drop hit the US, Canadian, and South American sales, blamed on COVID-19, oil industry consolidation, and a drop in shale extraction. Eastern hemisphere sales rose 1% to $6.03 mn in Q3—meaning the rest of the world.

9-mo revenues were down only $6 mn. Diluted net income in Q3 fell to $5.875 mn or 7¢/sh from 8¢ in FY Q3 2020. Free cash flow per share hit 9¢. Operating expenses fell 35% in part because executives and board members took a cut in benefits, gaining eligibility for Canadian benefits worth $4.3 mn. It actually hired a few more people in the quarter. Having chopped the dividend to 5 loony cents after its Q1 results, CMDXF retained that level this month. For the 9 months, revenues fell 12% or $6.7 mn to $50.562 mn, with modest gains in South America, probably from new drilling in Guyana.

Now for some good news. CMDXF continued its R&D as customers switched to an energy transitionl mode, to recover and sequesterd carbon. It also get new business from geothermal projects like those from Ormat. The end result is that 9-mo realized earnings were at 75% of prior year in perpetual revenue and a big order from an unnamed southeast Asian customer. Declining production does not stop reservoir modeling. Its operating expenses without the Canadian benefits 42% for the quarter and 40% for the 9-mos, aligned with 2019-20.

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William K. 3 weeks ago Member's comment

Thanks for an enjoyable read, VL.